Donald Trump has been referring to the American Dream being over. And, of course, about how he would play an instrumental, as President, in reviving this dream. I wonder if Donald Trump actually understands the American Dream, and whether his policies are in synch with it.

America has been long known as the land of opportunity. The core values of this country include:

Against this backdrop, let’s have a look at some of the policies of Mr. Trump, who is the Republican candidate in the US Presidential Elections to be held in November 2016, and will be standing against Hilary Clinton, the Democratic candidate.

The Good

Some of Trump’s policies are aligned to these values. After all, he has spoken about reducing taxation, as this will help the economy by giving a boost to consumption, his policies on trade are likely to backfire on the American economy.

The Bad

Trump has vowed to impose high import tariffs on good from Mexico and China. Doesn’t sound much like free trade to me! This policy could severely hurt American manufacturers, who are dependent on global supply chains that supply them with parts.

Donald Trump has argued that other countries are unfairly taking advantage of the US through a combination of high taxes on American products and devaluing their own currencies. According to Trump, the solution is to levy high tariffs on the goods of any country he believes is treating America unfairly.

Trump has called for tariffs of 35% on Ford vehicles from their plant in Mexico and 45% on Chinese goods. He has also proposed tariffs on other specific goods produced by American companies on foreign soil, such as Carrier air conditioners, which are made in Mexico.

The Ugly

Experts say such restrictive policies will do more harm than good to the US economy. American businesses and consumers bought $481.9 billion in Chinese goods in 2015, about one-fifth of all imports and the most from any country.

The impact of Donald Trump’s high import tariff would not reverse this trend. Firstly, China and any other countries that are at the receiving end may choose to retaliate by imposing tariffs on American goods. Secondly, American manufacturers would suffer. According to Caroline Freund, a senior fellow at the Peterson Institute for International Economics, extreme tariffs would also hurt American manufacturing — the very sector that Trump says he seeks to bolster — by raising the prices on production inputs sourced from abroad. Steel from China, for example, would become significantly more expensive for more US firms.

Thirdly, a tax on goods imported from China would disproportionately hurt the poor by pushing up the prices on many of the products they most frequently use, according to Freund. Experts claimed that Trump’s strong measures could start an international trade war. For example, if China were unable to sell to the US, it would try and sell them at an even lower price in other countries, who would then oppose China’s “dumping” of cheap goods and impose tariffs of their own.

The end result is high prices around the world, and a slowdown in international growth — or even an outright recession.

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Rakesh Wadhwa. Ever since, I was a school boy, I knew India was on the wrong path. Socialism was just not what we needed to get ahead. Government controlled our travel; government controlled our ability to buy and sell; and government controlled our freedom to move our money. My life has focused on the inherent rights people have. When I was in college, I never understood, what the governments meant by their "socialistic attitude". If people are free to buy, sell and move their capital themselves without any restrictions by state, then the welfare of people is inevitable & hence the countries they live in will become wealthy. The government has no right whatsoever, to point a finger at me or my business. I am not a revolutionary. I just want to light up my cigarette and not get nagged about it. I believe in non-interfering attitude to attain more.

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The Bastiat Award is a journalism award, given annually by the International Policy Network, London.
Bastiat Prize entries are judged on intellectual content, the persuasiveness of the language used and the type of publication in which they appear. Rakesh Wadhwa won the 3rd prize (a cash award of $1,000 and a candlestick), in 2006.

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Yes, India does possess the capacity to overtake the USA and that is precisely what will happen - not in some indeterminate future but by the year 2010. How? That is what the book is all about.

I am…

Rakesh Wadhwa. Ever since, I was a school boy, I knew India was on the wrong path. Socialism was just not what we needed to get ahead. Government controlled our travel; government controlled our ability to buy and sell; and government controlled our freedom to move our money. My life has focused on the inherent rights people have. When I was in college, I never understood, what the governments meant by their "socialistic attitude". If people are free to buy, sell and move their capital themselves without any restrictions by state, then the welfare of people is inevitable & hence the countries they live in will become wealthy.